BIR Ruling No. 443-2016

REPUBLIC OFTHE PHILIPPINES

DEPARTMENT OF FINANCE BUREAU OF INTERNAL REVENUE

Quezon City

E.O.226RR 2-98 BIR Ruling No. 342-14; BIR Ruling No. 329-14 #443-2016 12-19-2016

Marbella 101 Condominium, Ground Floor, Unit 1 2223 Roxas Blvd., Pasay City 1300 DDC LAND, INC.

Attention: Engr. Edna R. Sutter

President & CEO

Gentlemen:

the tax consequences of the Income Tax Holiday (ITH) granted by the Board of known as the "Omnibus Investments Code of 1987, for a period of four (4) years from the Start of commercial operations/ selling. Investments (BOI) to DDC LAND, INC.under Executive Order (EO) No.226 otherwise This refers to your letter dated December 17, 2015, applying for tax exemption on

of Economic and Low-Cost Housing Project on a Non- Pioneer status for the mass housing existing under Philippine Laws; that it is registered with the Securities and Exchange engaged in real estate development; that it is registered with the BOI as a New Developer Commission (SEC) bearing SEC Certificate of Registration No.) Identification No.TIN project: Documents submitted disclosed that DDC LAND, INC., with Taxpayer's , is a domestic corporation duly organized and I; that it is

Villas North Projeet Garden Dasma Name Dasmarinas. Salawag. Location Brgy. BOI Reg. NO. Date of BOI Registration January 5, 2016 Commercial Operation/ Start of January 2016 ITH No. of Units

Cavite

DDC Land, Inc./Dasma Garden Villas North Page 2 of 4 443-2016 12-19-2016

that under the Specific Terms and Conditions of its BOI Registration, DDC LAND, INC. Dasma Garden Villas North-Brgy.Salawag,Dasmarif, Cavite Project based on this Shall construct and sell One Hundred Fifty Eight (158) units of low-cost mass housing for schedule:

Dasma Garden Villas North Project Name Year 1 (No. of Units) Volume 48 (PhP) Value

3 2 5 55 Total 158

that Dasma Garden Villas North, located at Brgy. Salawag, Dasmarinas, Cavite, is duly registered with the Housing and Land Use Regulatory Board (HLURB) and was issued a License to Sell, to wit:

Villas North Project Garden Dasma Name Brgy. Salawag. Dasmarifias, Location Cavite of Registration No. HLURB Certificate December 22,2014 Date Issued December 22, 2014 HLURB License to Sell No./Date Issued No. of Units

ITH for a period of four (4) years from January 2016 or the actual start of commercial operations whichever is earlier, but in no case earlier than the date of registration; that DDC Land, Inc. (Dasma Garden Villas North-Brgy. Salawag, Dasmarinas, Cavite)'s ITH Inc. (Dasma Garden Villas North-Brgy. Salawag, Dasmarinas, Cavite) is entitled to shall be limited only to the revenue generated from the registered project; and that revenues from units with selling price exceeding P3.OM shall not be covered by ITH. that according to the Specific Terms and Conditions of its BOI Registration, DDC Land.

by the Omnibus Investments Code of 1987. (BIR Ruling No. 342-14 dated August 26, 2014) Regulations No. 2-98, as amended, by RR No. 6-2001 implementing Section 57 (B) of the not apply to income payments to persons enjoying exemption from the income tax provided Tax Code of 1997, as amended, the withholding tax prescribed in the said Regulations shall In reply, please be informed that under Section 2.57.5 (B)(2) of Revenue

mass housing units as mentioned in the Specific Terms and Conditions of its BOI Registration), are exempt from the creditable withholding tax imposed under RR No. 2-98. as amended by RR No. 6-2001, for a period of four (4) years from January 2016 or the Salawag, Dasmarinas, Cavite) is a BOI-registered project, this Office is of the opinion that income payments received by DDC Land, Inc. in connection with its housing project, Dasma Garden Villas North-Brgy. Salawag, Dasmarinas, Cavite, (on the 158 low-cost Accordingly, since DDC Land, Inc. (Dasma Garden Villas North-Brgy.

W

'32016

DDC LandInc./Dasma Garden Villas North Page 3 of 4 12192016

actual start of commercial operations whichever is earlier but in no case earlier than the date of registration'.

withholding tax covers only income directly attributable to revenues generated from DDC units used solely for family home or dwelling purposes and not for commercial purposes such as leasing, retail stores, offices, etc. Furthermore, such exemption shall not cover revenues from units with sclling price exceeding Three Million Pesos (P3,000,000.00) Land, Inc.s BOI-registered activity Dasma Garden Villas North-Brgy. Salawag, Dasmarinas, Cavite, involving One Hundred Fifty Eight (158) low-cost mass housing (BIR Ruling No. 342-14 dated August 26, 2014) It must be emphasized, however, that the above exemption from creditable

considered as part of the revenues generated from the registered activity. In the computation of ITH, interest income from in-house financing shall not be

Brgy. Salawag, Dasmarinas, Cavite) to ITH is not automatic as such project has to comply with the Specific Terms and Condition of its pertinent BOI Registration. Moreover, the entitlement of DDC Land, Inc. (Dasma Garden Villas North-

than those granted under E.O. 266. In this regard, under the terms and conditions of its BOI registration, DDC Land, Inc. (Dasma Garden Villas North-Brgy. Salawag, Dasmarinas, Cavite) was clearly granted 4-year ITH but such terms and conditions do not transactions. Thus, DDC Land, Inc. (Dasma Garden Villas North-Brgy. Salawag, Dasmarinas, Cavite) will remain subject to Value-Added Tax (VAT) and Documentary provide for any exemption from other taxes that it may be subject to on its business Furthermore, BOI-registered enterprises enjoy no tax exemption/privileges other

Stamp Tax (DST) on its sales of housing units pursuant to Sections 106 (A(1)(a) and 196 of the Tax Code of 1997, as amended. (BIR Ruling No. 329-14 dated August 14, 2014

In relation thereto, Section 109(1)(P) of the Tax Code of 1997 provides, that the

(Dasma Garden Villas North-Brgy. Salawag, Dasmarinas, Cavite) of housing units VAT. (BIR Ruling No. 329-14 dated August 14, 2014) sale of residential lot valued at One Million Nine Hundred Nineteen Thousand Five Hundred Pesos (P1,919,500.00)and below, or house and lot and other residential dwellings valued at Three Million One Hundred Ninety Nine Thousand Two Hundred Pesos (P3.199,200.00 and below is VAT-exemptThus, only the sales by DDC Land,Inc. with selling price of not more than the aforementioned price ceiling shall be exempt from

under the 1997 Tax Code, as amended, using the electronic system for filing and payment of taxes of the BIR. Furthermore, DDC Land, Inc. shall file with the BOI a complete required to file its tax returns and pay its tax liabilities, on or before the deadline as provided annual tax incentives report of its income-based tax incentives, value-added tax (VAT) and Pursuant to Section 4 of Republic Act (R.A.) No. 10708, DDC Land, Inc. is

1Movement of ITH period is subject to Art.7 of E.O.226 per BOI Specific Terms and Conditions No.1 2 The increase in the threshold amount for the sale or lease of goods or properties or the performance of services covered by Section 109 (P), (Q) and (V) of the 1997 Tax Code took effect on January 1, 2012, pursuant to Revenue Regulations No.16-2011 dated October 27,2011.

Page 4 of 4 DDC Land, Inc./Dasma Garden Villas North #443-2016 12-192016

duty exemptions, deductions, credits or exclusions from the tax base, as may be provided under E.O. 226, within thirty (30) days from the deadline for filing of tax returns and payment of taxes.

agent for the government if its acts as employer and any of its employees received compensation income subject to compensation withholding tax, or if it makes payments to individuals or corporations, subject to the withholding taxes as source as required under Chapter XIII and Section 57 of the Tax Code of 1997, as amended and impiemented by RR No. 2-98, as amended. It should be understood that DDC Land, Inc. shall be constituted as a withholding

month following the close of its accounting period of a Profit and Loss Statement and Balance Sheet with the Annual Information Return under oath, stating its gross income and expenses incurred during the taxable year. Likewise. DDC Land, Inc. is required to file on or before the 15TH day of the fourth

subject to periodic examination by revenue enforcement officers of this Bureau for the purpose of ascertaining whether it has been complying with the conditions under which it has been granted tax exemption or tax incentives and its tax liability, if any, pursuant to Section 235 of the Tax Code of 1997, as amended. Finally, DDC Land, Inc.'s books of accounts and other pertinent records shall be

However, if upon investigation, it will be disclosed that the facts are different, then this ruling shall be considered null and void. This ruling is being issued on the basis of the foregoing facts as represented.

Very truly yours.

Aa,awa

Commissioner of Internal Revenue CAESAR R.DULAY 002596

K-1-JAC